Bond x is callable and matures in 10 years bond y is, Ask an Expert

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Bond X is callable and matures in 10 years. Bond Y is non-callable and matures in 30 years. If interest rates in the bond market rise, which of the following statements is correct?

a. Both bonds will rise in value but Bond X will rise less than Bond Y.

b. Bond X will be called while Bond Y will fall in value.

c. Both bonds will fall in value but Bond Y will fall more than Bond X.

d. Bond X will rise in value and Bond Y will rise in value, but Bond Y will rise less than Bond X.

e. Both bonds will experience an equal percentage decline in value.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91559489

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